PALMOILMAGAZINE, JAKARTA — The Indonesian government is reinforcing its commitment to sustainable palm oil management through a series of strategic policies, most notably Presidential Regulation (Perpres) No. 16 of 2025. This regulation marks a significant step in expanding and strengthening the Indonesian Sustainable Palm Oil (ISPO) certification system across the entire palm oil supply chain.
According to Ratna Sariati, Head of Quality Implementation and Monitoring for Plantation Products at the Ministry of Agriculture, ISPO is more than just a certification label. It is a comprehensive system that ensures palm oil production aligns with economic, socio-cultural, and environmental sustainability, while also complying with national laws.
“ISPO certification serves as written proof that palm plantations are managed sustainably,” she explained at the Forwatan journalist forum event themed “Perpres 16/2025 ISPO untuk Industri Sawit Berkelanjutan” in Jakarta on June 4, 2025, attended by Palmoilmagazine.com.
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The legal foundation of ISPO is anchored in Law No. 39 of 2014 on Plantations, especially Articles 2, 3, and 62. The implementation initially referred to Perpres No. 44 of 2020, now updated to Perpres No. 16 of 2025. This revision broadens ISPO’s scope from upstream to downstream sectors, covering processing industries and bioenergy, thus involving not just the Ministry of Agriculture but also the Ministry of Industry (Kemenperin) and the Ministry of Energy and Mineral Resources (ESDM).
“This expansion includes institutional restructuring and a new financing scheme. ISPO certification for farmers can now be funded by the national and regional budgets, or through the Palm Oil Plantation Fund Management Agency (BPDPKS),” said Ratna
She also noted that administrative sanctions—such as warnings, fines, or temporary suspension—can be imposed on businesses that fail to comply with ISPO standards.
As of February 2025, a total of 1,157 entities have obtained ISPO certification, covering 6.2 million hectares. About 84% of these are private companies, 9% are state-owned enterprises, and 7% are smallholder farmers. Indonesia now surpasses Malaysia in certified sustainable palm plantation area.
Ratna added that a revision of Agriculture Minister Regulation (Permentan) No. 38/2020 is underway to align with Perpres No. 16/2025. Previously, Permentan 38/2020 served as a derivative of the earlier regulation, Perpres No. 44/2020.
Expanding ISPO to the Downstream Sector
In line with the regulation, the Ministry of Industry is currently developing an ISPO certification scheme for downstream palm oil products. Lila Harsyah Bakhtiar, Director of Oleochemicals and Feed at the Ministry, said that while the terminology is still flexible, the core principle remains: ensuring that processed palm oil products originate from sustainable sources.
She highlighted the importance of traceability, especially since only 10% of Indonesia’s palm oil exports are in crude form, with the rest being processed products. “Downstream ISPO certification will act like a halal label, giving consumers confidence that the product is sustainable,” said Lila.
Indonesia currently produces 190 types of palm oil derivatives, though only high-volume and high-market-potential products will be prioritized for certification. Certified products will feature the ISPO logo on packaging to signify compliance with sustainability principles.
The certification model will adopt a mass balance approach, allowing blending of certified and uncertified raw materials under strict oversight. The scheme will draw from global standards such as RSPO, ISCC, and MSPO.
Unlike SNI (Indonesian National Standard), ISPO downstream certification focuses on production processes, with the logo affixed to the final product. It will adhere to three core principles: regulatory compliance, robust documentation, and sustainable business practices aligned with the UN Sustainable Development Goals (SDGs).
The draft regulation on downstream ISPO certification is set for public consultation by June 2025, and its implementation will refer to Minister of Industry Regulation No. 45/2020. The government aims for an inclusive and collaborative approach to ensure effective implementation without burdening businesses.
GAPKI Proposes Daily Executive for ISPO Committee
- Azis Hidayat, Head of the Plantation Division at the Indonesian Palm Oil Association (GAPKI), proposed establishing a daily executive unit for the ISPO Committee, citing limitations in the current organizational structure to handle technical certification tasks efficiently.
The previous ISPO Committee had a Supervisory Board led by the Coordinating Minister for Economic Affairs. However, under the new structure, the board has been eliminated and the committee is now chaired directly by the Coordinating Minister.
Azis emphasized that a dedicated executive body would enhance the daily technical and administrative operations of the ISPO program.
According to the Directorate General of Plantations, only about 100,000 hectares of smallholder farms have been certified—far below the total of 6.94 million hectares. The main obstacle for farmers is land legality, as most lack land titles (SHM) or cultivation registration letters (STDB). “Of the total, only about 980,000 hectares are legally documented. What about the remaining 6 million?” he questioned.
Large companies face similar challenges. Many still lack formal land use permits (HGU), which hampers their ability to qualify for ISPO certification.
Despite these hurdles, GAPKI remains committed to achieving 100% ISPO compliance. “We’ve set up a dedicated plantation division focused on ISPO and farmer partnerships, and I personally lead this initiative,” said Azis.
As of June 2025, 687 out of GAPKI’s 1,177 members (about 58%) are ISPO certified, covering a total of 3.6 million hectares. “We continue pushing to hit the 100% mark,” he affirmed.
GAPKI also operates ISPO clinics in 15 provinces and offers auditor training for its members, often at discounted rates. During the recent International Palm Oil Conference (IPOC) in Bali, GAPKI hosted a consultation café providing education, advocacy, and technical assistance on ISPO, replanting (PSR), and broader palm oil challenges.
GAPKI views itself as a strategic partner of the government in advancing sustainable palm oil. “Our role is to ensure effective implementation on the ground and to provide constructive feedback when policies fall short,” Azis emphasized.
Solidaridad Empowers Farmers for ISPO Certification
Solidaridad Indonesia, an active civil society organization in upstream palm oil, is committed to helping smallholders achieve ISPO certification.
Edy Dwi Hartono, Head of Program Development, noted that only about 1% of the 2.5 million smallholder farmers—managing a total of 6.9 million hectares—have been ISPO certified. “This is a major challenge we must overcome to prevent farmers from being left behind in the industry,” he said.
Solidaridad is currently active in several provinces, including West, Central, and East Kalimantan, as well as Lampung. Despite working with other commodities, palm oil remains its main focus.
Through its “Reclaim Sustainability” project, Solidaridad supports farmers in adopting sustainable practices and meeting ISPO and RSPO certification standards. Between 2019 and 2024, it trained 24,687 farmers and mapped 6,929 land parcels covering 8,955 hectares, resulting in 4,862 registered cultivation documents (STDB).
To date, only 220 farmers from Solidaridad-supported groups have achieved ISPO certification, while 1,023 are RSPO certified, and 2,463 hold Regen Agri certification.
Edy expressed support for Perpres No. 16/2025, particularly in its emphasis on multi-stakeholder collaboration and farmer readiness. For example, Article 4 highlights the need to strengthen farmer organizations. Solidaridad works with credit unions and farmer associations, including SPKS and the Keling Kumang Consortium, to advance this goal.
While Solidaridad provides support in training and mapping (Article 16), it does not yet cover certification audit costs. “We hope the BPDPKS can step in to help expedite the certification process,” Edy said.
The organization also regularly holds focus group discussions and field schools (Article 3) to raise farmers’ awareness on sustainable practices and socio-environmental issues. Moreover, it engages in multi-stakeholder forums (Article 23), including the “Recruitability” platform, to promote ISPO implementation through collaboration with key actors like PPHBUN and BPDPKS.
“ISPO is well understood at the national level, but there’s still a significant knowledge gap at the local level,” Edy concluded. (P3)
